Capital Southwest (CSWC) Competitors

Capital Southwest (NASDAQ:CSWC) and Ares Capital (NASDAQ:ARCC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings, analyst recommendations and media sentiment.

Is CSWC or ARCC a better dividend stock?

Capital Southwest pays an annual dividend of $2.32 per share and has a dividend yield of 10.0%. Ares Capital pays an annual dividend of $1.92 per share and has a dividend yield of 8.3%. Capital Southwest pays out 156.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ares Capital pays out 93.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capital Southwest has increased its dividend for 2 consecutive years. Capital Southwest is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Does the media favor CSWC or ARCC?

In the previous week, Ares Capital had 18 more articles in the media than Capital Southwest. MarketBeat recorded 27 mentions for Ares Capital and 9 mentions for Capital Southwest. Ares Capital's average media sentiment score of 1.12 beat Capital Southwest's score of 0.42 indicating that Ares Capital is being referred to more favorably in the news media.

Company	Very Positive	Positive	Neutral	Negative	Very Negative	Overall Sentiment
Capital Southwest	1 Very Positive mention(s)	0 Positive mention(s)	6 Neutral mention(s)	0 Negative mention(s)	0 Very Negative mention(s)	Neutral
Ares Capital	17 Very Positive mention(s)	4 Positive mention(s)	4 Neutral mention(s)	0 Negative mention(s)	1 Very Negative mention(s)	Positive

Do insiders & institutionals have more ownership in CSWC or ARCC?

23.4% of Capital Southwest shares are held by institutional investors. Comparatively, 27.4% of Ares Capital shares are held by institutional investors. 2.8% of Capital Southwest shares are held by insiders. Comparatively, 0.5% of Ares Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Is CSWC or ARCC more profitable?

Ares Capital has a net margin of 43.50% compared to Capital Southwest's net margin of 34.51%. Capital Southwest's return on equity of 14.40% beat Ares Capital's return on equity.

Company	Net Margins	Return on Equity	Return on Assets
Capital Southwest	34.51%	14.40%	6.93%
Ares Capital	43.50%	11.05%	5.25%

Which has preferable earnings and valuation, CSWC or ARCC?

Ares Capital has higher revenue and earnings than Capital Southwest. Ares Capital is trading at a lower price-to-earnings ratio than Capital Southwest, indicating that it is currently the more affordable of the two stocks.

Company	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital Southwest	$204.44M	6.11	$70.55M	$1.48	15.71
Ares Capital	$2.99B	5.40	$1.52B	$2.05	11.34

Do analysts recommend CSWC or ARCC?

Capital Southwest currently has a consensus price target of $24.00, indicating a potential upside of 3.23%. Ares Capital has a consensus price target of $22.21, indicating a potential downside of 4.45%. Given Capital Southwest's stronger consensus rating and higher possible upside, equities analysts plainly believe Capital Southwest is more favorable than Ares Capital.

Company	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital Southwest	0 Sell rating(s)	1 Hold rating(s)	4 Buy rating(s)	1 Strong Buy rating(s)	3.00
Ares Capital	0 Sell rating(s)	3 Hold rating(s)	5 Buy rating(s)	1 Strong Buy rating(s)	2.78

Which has more volatility & risk, CSWC or ARCC?

Capital Southwest has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Ares Capital has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Summary

Capital Southwest beats Ares Capital on 10 of the 19 factors compared between the two stocks.